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THE REGION : Measure Would Cut Taxes on Old Homes

October 02, 1994|GREG KRIKORIAN | TIMES STAFF WRITER

In a move that could safeguard historic structures for affordable housing, the Los Angeles City Council has agreed to give owners of older houses and apartments a property tax break if they pledge to restore and maintain their buildings for at least a decade.

The recent decision could apply to an estimated 3,600 buildings that have been designated by the city as historically or culturally significant. In addition, other buildings could receive the tax break if their owners persuade the city that the structures are historic.

A city report says that more than 70% of the older houses and apartments are concentrated in a handful of areas: South-Central Los Angeles, Southeast Los Angeles, West Adams, Boyle Heights, Wilshire, Silverlake/Echo Park and Northeast Los Angeles.

Preserving historic older units is important, city officials say, because those properties traditionally have the most affordable rents.

The council's action is allowed under a 1976 state law known as the Mills Act, which permits cities to cut property taxes on historically significant structures by an average of 50% so long as owners agree to upgrade and preserve the buildings for at least 10 years.

Although the law has been in place for nearly 20 years, city officials say it became more attractive after recent changes broadened the definition of historic properties.

It was those changes and a desire to preserve more affordable housing in Los Angeles that led Councilman Mark Ridley-Thomas to urge his colleagues to take advantage of the state law. His motion was seconded by Councilwoman Jackie Goldberg, who, like Ridley-Thomas, represents a district with many older neighborhoods.

Under the Ridley-Thomas motion, the property tax break would be available to historic single-family houses with an assessed value of no more than $500,000 and multifamily buildings with a valuation of $1.5 million or less. The new assessed valuation of properties would be determined under a formula that includes a variety of factors, such as a property's mortgage rate and monthly rent.

Although largely directed at residential buildings, the tax break could apply to other structures on the city's list of 596 historic or cultural monuments. The tax break also would apply to some 3,050 structures in the city's seven historic preservation zones.

To apply for the tax break, property owners would pay a non-refundable $25 fee. If their application is approved by the city's Cultural Affairs board, they would pay an additional one-time fee of $243 for the tax reduction that could save thousands of dollars by lowering the property's assessed valuation.

The measure is expected to return to the council for final action by late October and, if approved as expected, would become law as early as December.

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